Todd Sullivan Blog | Subs: Friday’s Links | Talkmarkets
Hedge Fund Manager, Owner of ValuePlays and Angel Investor
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Todd Sullivan is a Massachusetts-based value investor and a General Partner in Rand ... more

Subs: Friday’s Links

Date: Friday, May 25, 2018 8:29 AM EDT

1- Despite rumors, GE won’t be cutting the dividend

If one reads Flannery’s comments, what he is saying is the exact level of GE’s dividend may change (up or down) but that may be a function of what is done with the businesses. For example: If GE holders see their GE dividend fall $.04 but get a $.6 dividend from the Wabtec deal, then they are ahead in the end even with the GE drop:

 With respect to the dividend, I would just come back and say a few things. We’ve talked before about the importance to our investors. So we know that, that’s a key component of the valuation and attraction of the stock is what’s going on with the dividend. We’ve talked about balanced capital allocation, what makes sense for the business in terms of that mix of dividend, et cetera. It’s ultimately a function of the free cash flow of the company. And that’s ultimately a function of our operating performance with the assets and things that we do with the portfolio.

With respect to the Wabtec and the effect of the Wabtec transaction, right now we’re looking and saying, we’ve got to see how this plays out. We’ve got a lot of other things going on with the portfolio. We don’t know the spin or split form of that transaction. We’re not locked in fully to the Wabtec dividend policy, et cetera. We’ll make a specific call about that at the time of closing. But so I’d keep coming back to the main things. It’s important to our investors. It’s a function of our cash flow. That’s a function of our performance which would — that’s where our day-to-day focus is. It’s a function of what happens with the portfolio. And as those things unfold over time, the dividend will cover that.

2- FDC getting into the student loan market

3- Buybacks are good…

4- FDC also sheds some ancillary assets in the EU

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